Bombay High Court
Gopal Kashinath Kele (Lad) And Ors vs Abhay Pandharinath Kele And Ors on 11 March, 2021
Bench: Nitin W. Sambre
WPST-99295-2020.doc
BDP-SPS
BHARAT
DASHARATH
PANDIT
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Digitally signed
by BHARAT
DASHARATH
PANDIT
Date: 2021.08.27
16:13:25 +0530
CIVIL APPELLATE JURISDICTION
WRIT PETITION (ST) NO.99295 OF 2020
ALONGWITH
WRIT PETITION NO.800 OF 2021
Gopal Kashinath Kele (Lad) and Ors. ...Petitioners
V/s
Abhay Pandharinath Kele & Ors. ....Respondents
----
Mr. A.V. Anturkar, Senior Advocate i/b Mr. Akshay Petkar for the
Petitioners in both the above Writ Petitions.
Mr. S.M. Gorwadkar, Senior Advocate i/b Mr. Pratap Patil for
Respondent Nos. 1 to 3 in both the above Writ Petitions.
----
CORAM: NITIN W. SAMBRE, J.
DATE: MARCH 11, 2021
P.C.:-
1] Identical orders passed by the Principal District Judge, rejecting
the prayer for transfer of proceedings under Section 24 of the Civil
Procedure Code are subject matter of challenge in the present Writ
Petitions.
WPST-99295-2020.doc
2] Parties to the Petition and nature of challenge in main
proceedings of which transfer is sought are also identical.
3] In view of above, by consent, both these Petitions are heard
together and disposed of by this common order.
4] For the sake of convenience, facts in Writ Petition (St) No.99295
of 2020 are taken into account.
5] Petitioners initiated proceedings under Section 34 of the
Arbitration Act in the Court of District Judge, Pune questioning the
interim Arbitration Award dated 12/2/2020. Alongwith the said
proceedings, Petitioner filed pursis dated 8/7/2020 stating that the
said application under Section 34 is not commercial proceedings.
Considering the nature of challenge raised under Section 34 another
Application under Section 24 of the C.P.C. being Application No.500 of
2020 came to be moved before the learned Principal District Judge
with a prayer that the proceedings preferred under Section 34 of the
Arbitration Act be transferred from the file of 8th District Judge to
WPST-99295-2020.doc
Commercial Court at district level in Pune. After resistance by the
Respondents, vide order impugned dated 4/12/2020, said prayer was
rejected by the learned Principal District Judge. As such, this Writ
Petition.
6] Mr. Anturkar, learned Senior Counsel appearing for the
Petitioners would urge that provisions of Section 24 of C.P.C.,
particularly sub-sections (1), (3) and (5) provide that the Court of
learned District Judge is subordinate to Principal District Judge. He
would rely on the judgment of this Court in the matter of D.M.
Corporation Pvt Ltd. vs. State of Maharashtra and others reported in
2018(4) Mh.L.J. 457 so as to substantiate his contention that nature of
dispute in the present proceedings is commercial dispute within the
meaning of Section 2(c) of the Commercial Courts Act 2015
(hereinafter referred to as "the Act" for the sake of brevity) and as
such Commercial Court alone will have jurisdiction to entertain the
proceedings.
7] According to him, court below has failed to exercise jurisdiction
and that being so, case for interference is made out.
WPST-99295-2020.doc
8] Mr. Gorwadkar, learned Senior Counsel appearing for
Respondent Nos. 1 to 3 would urge that the learned Principal District
Judge rejected the prayer under Section 24 of the C.P.C. seeking
transfer of the proceedings, particularly when there is scope to
disagree with the submission about existence of commercial dispute.
As such, according to him, Petitions are liable to be dismissed.
9] I have appreciated aforesaid rival contentions.
10] Parties to the Petition are family members and also partners in
around four Firms which are into real estate development business. In
view of differences inter se in the capacity of partners of Firms, in
2012 a Mediator was appointed to resolve the dispute.
11] Since the mediation failed, a recourse was taken to arbitration
proceedings and an interim award came to be passed on 12/2/2020 in
which directions are issued in regard to the amount to be shared
between the parties in their capacity as partners of the Firms. On
16/3/2020, final award came to be passed wherein dispute in relation
WPST-99295-2020.doc
to management of the Firms, its assets and Accounts came to be
adjudicated.
12] The fact remains that Arbitration and Conciliation Act, 1996 is
relating to domestic, international commercial arbitration and also
provides for enforcement of foreign arbitral awards. In case of
domestic arbitration, under the same Section 2(1)(e) of the
Arbitration Act, the "Court" is defined to mean "the principal civil
court of original jurisdiction in a district". The said definition is not
inclusive.
13] In 2018, Commercial Courts Act underwent amendment wherein
under Section 2(1)(b), "Commercial Court" is defined to mean the
Commercial Court constituted under sub-section (1) of Section 3. The
said amendment permits State Government to constitute Commercial
Courts at district level also. Sub-section (3) of Section 3 enables
constitution of Commercial Court at the level of District Judge or
below to that level and as per Amended Section 3A Commercial
Appellate Court at District Judge level. Section 6 defines jurisdiction
and Section 10 deals with jurisdiction in respect of arbitration matters.
WPST-99295-2020.doc
14] Section 11 provides for bar of jurisdiction of Commercial Courts
and Commercial Divisions. Inherent lack of jurisdiction of Civil Court
is equally made applicable to the Commercial Court. The Commercial
Court substitutes Civil Court in the matter of jurisdiction to be
exercised in the case of commercial dispute, as appears to be
legislative intent. As at District Court level even Commercial
Appellate Court are constituted by 2018 Amendment which powers
are to be exercised based on pecuniary jurisdiction, appeal therefrom
lies to the Commercial Appellate Court. The legislative object is to
provide speedy remedy.
15] Following provisions of the Act are required to be appreciated.
Section 2(c) of the Act defines "commercial dispute" whereas Section
2(i) defines "Specified Value". It further makes reference to Section
12 of the Act. Section 12 provides for determination of Specified
Value. Sub-clause (c) of Section 12 in my opinion is relevant for the
case in hand. In case where the relief sought in a suit, appeal or
application relates to immovable property or to a right therein, the
market value of the immovable property, as on the date of filing of the
WPST-99295-2020.doc
suit, appeal or application is required to be taken into account for
determining Specified Value.
16] Sub-section (3) of Section 10 of the said Act provides for
jurisdiction in respect of arbitration matters. In case if arbitration
other than international commercial arbitration, application or appeal
arising out of such arbitration under the provisions of the Arbitration
and Conciliation Act, 1996 which ordinarily lie before principal Civil
Court of original jurisdiction in a District (not being a High Court) is
required to be heard and disposed of by Commercial Court exercising
territorial jurisdiction over such arbitration where such Commercial
Court has been constituted.
17] With the assistance of respective Senior Counsels, I have perused
the final award which is a subject matter of challenge under Section
34 of the Arbitration and Conciliation Act. Admittedly, the Award
deals with commercial dispute in between the parties to the present
Petition as could be apparent from adjudication reflected therein. The
said Award is a subject matter of challenge under Section 34 of the
Arbitration and Conciliation Act and the Petitioner who initially opted
WPST-99295-2020.doc
for dealing with the said application as arbitration application.
Petitioner at that point of time has not opted for invoking jurisdiction
under sub-section (3) of Section 10 of the Commercial Courts Act to
try the same as commercial dispute.
18] Once it can be inferred under Section 2 sub-clause (i) read with
Section 12 that there exists a commercial dispute with Specified Value
above ₹ 3 lakhs then the provisions of Commercial Courts Act are
applicable. It is required to be noted that commercial dispute as
defined under the provisions of the Commercial Courts Act covers
dispute arising out of agreements relating to immovable property used
exclusively for trade or commerce, partnership agreements etc. As
such, having regard to nature of dispute and claim therein it can be
inferred that there exists a commercial dispute in between the parties
to the present proceedings. Once it is inferred that there exists a
commercial dispute between the parties, provisions of sub-section (3)
of Section 10 as regards jurisdiction in respect of arbitration matters is
attracted. As such, Mr. Anturkar was justified in claiming that there
exists a commercial dispute of Specified Value and same is required to
be decided in accordance with the procedure laid down under sub-
WPST-99295-2020.doc
section (3) of Section 10 of the Commercial Courts Act.
19] There is one more facet to the matter i.e. admittedly proceedings
are arising out of the Arbitration Award and that being so, from the
contents of the Award, it can be inferred that commercial dispute of
Specified Value of more than ₹ 3 lakhs exists between the parties.
20] In the aforesaid backdrop, once having held that there exists a
commercial dispute of Specified Value which is arising out of
arbitration proceedings, the application preferred by the Petitioner has
to be treated to be one under the provisions of sub-section (3) of
Section 10 of the Act.
21] Once it is held that nature of proceedings is commercial dispute
with a Specified Value and Section 10 sub-section (3) provides for
jurisdiction in respect of arbitration matter, the proceedings at the
behest of the Petitioner under Section 34 will lie before the
Commercial Court in accordance with the said provision. Merely
because Petitioner has filed an application thereby praying for treating
the application to be one under Section 34 of the Arbitration and
WPST-99295-2020.doc
Conciliation Act will not operate as an embargo or rider on the right of
the Petitioner to claim trying of the said proceedings questioning the
Award passed under the Arbitration and Conciliation Act as arbitration
matter under sub-section (3) of Section 10 of the Act.
22] As such, it can be noticed that Commercial Court Act is a later
legislative enactment which operates in tandum with Arbitration Act
with the aim to achieve speedy adjudication.
23] Considering the very scheme of these Statutes, the applications
under Arbitration Act are required to be lodged and entertained by
Commercial Court.
24] That being so, in my opinion, learned District Judge has every
power under Section 34 of the Civil Procedure Code to transfer the
proceedings to the Commercial Court for dealing with the same in
accordance with the provisions of Section 10 of the Act and the
principle of estoppel will not come in the way of the Petitioner as same
will not operate against the law.
WPST-99295-2020.doc
25] Of course, from the aforesaid it can be inferred that inherent
jurisdiction is vested in the Court under the provisions of Section 10 of
the Act based on the subject matter of the dispute, as prima facie it
appears that it is the Commercial Court which will have jurisdiction
over it. Atleast it is not demonstrated as to why proceedings cannot be
covered within the meaning of "commercial dispute" at this stage.
However, aforesaid findings are required to be termed as prima facie
in nature and the Respondents have every right to raise the issue of
absence of any commercial dispute if they so desire as they have
disputed the same before this Court and this Court is required to
appreciate the contentions canvassed by the parties in the light of the
provisions of the Commercial Courts Act.
26] As such, for the aforesaid reasons, in my opinion, both the Writ
Petitions need to be allowed and are allowed in terms of payer clauses
(a) and (b).
( NITIN W. SAMBRE, J. )
